Return to Transcripts main page

Lou Dobbs Tonight

Rumsfeld Visits U.S. Troops in Iraq; CIA Identifies Likely Beheading Murder Suspect

Aired May 13, 2004 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Hello. I'm Wolf Blitzer, filling in for Lou Dobbs right now.
There were dramatic developments today in Iraq, dramatic developments involving the defense secretary, Donald Rumsfeld, and the chairman of the Joint Chiefs of Staff, Richard Myers. The defense secretary dropped in on U.S. troops in Baghdad.

the surprise visit gave him a firsthand look at a prison which has gained fresh notoriety around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It was behind these Abu Ghraib walls where U.S. soldiers abused Iraqi prisoners. And it was behind these same walls where Defense Secretary Donald Rumsfeld has now paid a hastily arranged visit.

DONALD RUMSFELD, SECRETARY OF DEFENSE: The people who engaged in abuses will be brought to justice. The world will see how a free system, a democratic system functions and operates transparently, with no cover-ups.

BLITZER: He toured the facility once used by Saddam Hussein's regime and was briefed by U.S. military commanders, before heading over to a town hall-style meeting with U.S. troops at what is called Camp Victory near the Baghdad Airport.

(CHEERING AND APPLAUSE)

BLITZER: Despite the enthusiastic reception, the specter of Abu Ghraib hovered over this event as well.

RUMSFELD: In recent days, there's been a focus on a few who have betrayed our values and sullied the reputation of our country. Like each of you, I'm sure, and like most Americans, I was stunned. It was a body blow.

BLITZER: While assuring the troops the Pentagon would get to the bottom of the investigation and punish all those involved, Rumsfeld also made clear his disdain for the news media and its coverage of the scandal.

RUMSFELD: I've stopped reading the newspapers.

(LAUGHTER) BLITZER: And despite calls for his resignation, he assured the troops he had no such intention.

RUMSFELD: It's a fact. I'm a survivor.

BLITZER: But just as Rumsfeld was trying to buck up the troops, it was also clear they were bucking him up as well. Responding to questions, he said he welcomed a new U.N. resolution that might further internationalize the military effort in Iraq and encourage, perhaps, 15 more nations to send badly needed troops there.

RUMSFELD: I'm encouraged. I think we'll find we will find that we will get additional forces.

BLITZER: For security reasons, the secretary, Joint Chiefs Chairman Richard Myers and a team of Pentagon lawyers gave no advanced notice of the overnight trip. Aboard the aircraft during the 15-hour flight, Rumsfeld denied it was simply designed to deal with the angry fallout from the prisoner abuse scandal.

RUMSFELD: If anyone thinks I'm there to throw water on a fire, they're wrong.

BLITZER: And on releasing publicly more of those prison pictures, he offered this.

RUMSFELD: My first choice would be to release them, but it's my understanding that at the present time the people who have an obligation to take into account privacy issues, legal requirements under privacy laws and Geneva Convention are advising against it.

(END VIDEOTAPE)

BLITZER: Let's get some more analysis now on what the defense secretary did today in the surprise visit to Iraq.

Let's bring in our senior Pentagon correspondent, Jamie McIntyre.

What's the sense among the officials you're speaking with over there on what happened today, Jamie?

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, the secretary himself made the point of saying that this was not an inspection tour. It wasn't a P.R. stunt. He really said he wanted to get on the ground and reassure the troops that the U.S. policy in Iraq was on track and that he, himself, was still firmly in charge, despite the calls for his head here in Washington, simply to give them a pat on the back.

Of course, while Rumsfeld was there, away from the heat of some of the questions in Washington, his deputies were up on the Hill taking more heat about the U.S. interrogation techniques, not the ones that are clearly abusive, but the ones that are approved by the Pentagon.

And Deputy Defense Secretary Paul Wolfowitz was pressed to admit that some of the things the U.S. does in the approved interrogation techniques may, in fact, violate the Geneva Conventions for the treatment of prisoners.

(BEGIN VIDEO CLIP)

SEN. JACK REED (D), RHODE ISLAND: Seventy-two hours without regular sleep, sensory deprivation, which would be a bag over your head for 72 hours, do you think that's humane? And that's what this says, a bag over your head for 72 hours. Is that humane?

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: Let me come back to what you said...

REED: No, no. Answer the question, Secretary. Is that humane?

WOLFOWITZ: I don't know whether it means a bag over your head for 72 hours, Senator. I don't know. REED: Mr. Secretary, you're non-responsive. Anybody would say putting a bag over someone's head for 72 hours, which is sensory deprivation...

WOLFOWITZ: I believe it's not humane. It strikes me as not humane, Senator.

REED: Thank you very much.

(END VIDEO CLIP)

MCINTYRE: That appeared to be somewhat of an admission from Deputy Defense Secretary Paul Wolfowitz that perhaps the techniques used by the U.S. skirt the boundaries of the Geneva Convention, while he didn't say that specifically.

These rules of course are designed to protect, of course, U.S. prisoners if they're in the hands of others. They specifically say that prisoners may not be exposed to unpleasant or disadvantageous treatment of any kind. The idea of course is this sort of golden rule, that is, treat the prisoners you have the way you would want your prisoners to be treated. And some of the members of Congress reviewing these policies by the Pentagon are convinced that that's not the case -- Wolf.

BLITZER: Jamie McIntyre at the Pentagon -- Jamie, thanks very much.

Lou Dobbs is now ready to take over. He's standing by in New York with much more -- Lou.

LOU DOBBS, CNN ANCHOR: Wolf, thank you very much for stepping in. And we appreciate it.

President Bush today met a group of House Republicans at the White House in an effort to make certain lawmakers understand the administration's policy on Iraq, admitting part of a new initiative to address congressional concerns about the prisoner abuse scandal and the political transition in Iraq.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, administration officials call this -- quote -- "Beltway disease."

They say a few Republicans joining Democrats, at least in privately grumbling to this White House that someone in the senior leadership at the Pentagon should be held accountable for all of this. On this day the White House believes it has quieted that criticism, especially among Republicans.

As you noted, the president at this hour meeting with some House members. You see him earlier in the day. The president was out in the state of West Virginia. He was hoping to focus on education in a state that he views as critical to his chances in November. But the president, of course, knows the prisoner abuse scandal dominating the discussion in Washington. He once again during this event weighed in, voicing his displeasure.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to say one other thing about our troops. Like you, I have been disgraced about what I've seen on TV, what took place in the prison. But the actions of a few do not reflect on the fantastic character of the over 200,000 men and women who have served our nation.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KING: Now, back here at the White House, the president inviting some Republican House members to spend some time with him to discuss policy in Iraq, not just the prisoner abuse scandal, but that certainly a key topic.

Administration officials believe that Secretary Rumsfeld greatly helped his cause by staging that dramatic trip to Baghdad. They said it shows to them anyway that he wants to get in front of the story, learn about the problems at the prison and make sure that those problems have now been ended. And also they believe it was critical for Secretary Rumsfeld to try to boost the morale of U.S. troops.

They also believe here at the White House, Lou, that Democrats have helped this president. So many Democrats demanding resignations, they believe that has rallied Republicans even critical of the Iraq policy to rally to the president's side.

And one more dynamic, Lou. White House officials say that dramatic, horrific video of the American, Nick Berg, being beheaded, they say that has convinced many lawmakers that this is not a time to be criticizing the commander in chief and perhaps putting those prisoner abuse pictures, as horrific as they are, in some perspective -- Lou.

DOBBS: John, as you pointed out, the administration under severe criticism from many in the Republican Party and certainly the Democratic Party for not including Congress in its reasoning, its planning, its strategy in Iraq. Does this signal a change, a more inclusive approach by an administration that to this point over the past certainly six months has been rather dismissive of the concerns of both the Senate and the House?

KING: It certainly does for now, Lou. You might want to ask that question in about two weeks. Sometimes this White House reaches out in times of crisis and then key members of Congress complain there is not sustained consulting and cooperation when things are more normal, if you will.

But the president had the chairman and the ranking Democrats of both the House and the Senate Foreign Relations, Foreign Affairs Committees here at the White House yesterday, 10 key Republican House members or so here today. More meetings planned. Additionally, Condoleezza Rice, the national security adviser, has made several trips to Capitol Hill in recent days.

So, at this moment the administration is reaching out quite aggressively. Members of Congress say they hope it continues.

DOBBS: John, thank you -- John King, senior White House correspondent.

The CIA today said al Qaeda's leader in Iraq, Abu Musab al- Zarqawi, probably the person who cut off the head of Nick Berg. The gruesome murder was shown on a video released on an Islamic Web site.

National security correspondent David Ensor reports now -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, CIA officials have done a technical analysis of the tape you mentioned showing the murder of American Nick Berg.

And as you say, they're now concluding that the hooded man who speaks first and then later on the tape can be seen killing Berg by beheading him is, with high probability, Abu Musab al-Zarqawi, the leader of the group in Iraq with a $10 million price on his head. Zarqawi is wanted for more than a score of bombings in Iraq, as well as the murder of an American diplomat in Jordan.

Officials say they now believe the terrorist leader personally killed Nick Berg. And they say that parallels with their confidence that "Wall Street Journal" reporter Danny Pearl was also beheaded by a top terrorist. In that case, it was Khalid Shaikh Mohammed, the al Qaeda leader who is the mastermind of the 9/11 attacks. Mohammed has been under interrogation by the CIA in an undisclosed location for some time now.

CIA and administration officials are refusing to comment on a report in "The New York Times" that Khalid Shaikh Mohammed has been subjected to what is called water-boarding, in which a prisoner is strapped and forcibly pushed under water and made to believe that he may be allowed to drown.

Officials do confirm however that after 9/11 the president approved new rules for interrogation of top terrorist prisoners which allowed additional forms of -- quote -- "pressure," and former officials, former officials, suggest that those include sleep deprivation, use of heat, cold, light, and loud noise.

U.S. officials draw a sharp distinction in their minds at least between what they see as the illegal abuse of Iraqi prisoners who should have been protected under the Geneva Conventions by soldiers in Iraq who they say were acting without authority, and on the other hand the CIA's use of pressure on al Qaeda prisoners which they stress has been very specifically authorized in writing by the White House and by the Justice Department -- Lou.

DOBBS: Any indication that the CIA using language like high probability, with all of the sophisticated technical capacity, can move to certainty on al-Zarqawi?

ENSOR: Very difficult. The quality of the tape is not ideal. It was, of course, fed over the Internet. It is a little murky in places.

But high probability suggests they're reasonably sure they're right. Now, in fairness, some other Arabic-language speakers who have looked at the tape are not so sure. But here you have the nation's premier intelligence agency saying they believe it is Zarqawi.

DOBBS: We don't have to be fair and balanced on this one, David. If the CIA can come up with high probability and perhaps certainty, that should be sufficient.

Let me ask you, any sense from the CIA, other military intelligence or State Department intelligence, other agencies that there is any chance in the world of quickly finding leads to Zarqawi?

ENSOR: You know, officials do say that they do have some leads, but you saw how long it took to find Saddam Hussein. This is a very elusive and clever character. As you mentioned earlier, with al Qaeda ties, he has plenty of wherewithal. It is going to be very, very difficult. And if they have good leads, they're not telling the likes of us.

DOBBS: That almost sounds like a suggestion, David, I know you don't mean it, that they have sufficient resources to withstand the might of the U.S. military, intelligence community, all of the capital resources of this country and our resources in intelligence. Difficult perhaps, but shouldn't all of those resources be arrayed against them?

ENSOR: Well, there's a $10 million reward for the capture or information leading to the capture of Abu Musab al-Zarqawi He is certainly moving up the list of most wanted rapidly at this point.

And you can imagine that a lot of resources are going into that hunt. So they believe they may find him. And if they do, there are a lot of questions they have for him. That's putting it mildly.

DOBBS: David, thank you very much -- David Ensor, our national security correspondent.

Nick Berg's father, Michael Berg, today said the terrorists who killed his son did not realize he was in Iraq to help rebuild their country. The family has also released e-mails from U.S. government officials that the family says proves Berg was in U.S. military custody.

Maria Hinojosa reports from Nick Berg's hometown of West Chester, Pennsylvania -- Maria.

MARIA HINOJOSA, CNN CORRESPONDENT: Lou, finally after three days of silence and seclusion, the mournful father of Nick Berg speaks out today. But there weren't tears. There were just very pointed accusations.

(BEGIN VIDEO CLIP)

MICHAEL BERG, FATHER OF NICK BERG: Nicholas Berg died for the sins of George Bush and Donald Rumsfeld. The al Qaeda people are probably just as bad as they are.

(END VIDEO CLIP)

HINOJOSA: Throughout the day, Lou, there were cards and flowers that continued to arrive here from all over the world. His father saying he feels like he's a citizen of the world. Perhaps his son was as well.

But in Iraq, there was more information about where Nick Berg was in his final days. Today, CNN was able to confirm that we spoke to the police chief in Mosul, Iraq, who said that in fact they had taken in Nick Berg, but that within a few hours, they had given him over to military forces, U.S. military forces, in Iraq.

Now, the United States continues to deny that he was ever in their custody. CNN also spoke to friends of Nick Berg who saw him in Iraq after he was released from detention. And they were saying that he had said that he was in U.S. custody under coalition protection in some kind of detention center. Another friend of his, a gym owner, said that Nick Berg never seemed afraid.

(BEGIN VIDEO CLIP)

SABAH TALEB MEHDI, GYM OWNER (through translator): He never appeared to care about the warnings or danger. He used to walk like he was in Washington or somewhere like that he knew.

(END VIDEO CLIP)

HINOJOSA: Now, this, Lou, of course, a lot of difficult information for this family to process as they prepare to say goodbye to their son tomorrow with a private family funeral and then a public memorial, not open entirely to the public, but to Nick Berg's family and close friends -- Lou.

DOBBS: Maria, what can you tell us about the information that Nick Berg apparently had some sort of encounter with what are termed terrorist people in Oklahoma? What do you know about that?

HINOJOSA: This is one of the questions that Nick Berg's father answered today.

Apparently, there was a period of time, A short period of time when Nick Berg was studying at the Oklahoma University. And there was an off-cam pause site he used to take a bus trip to. On one of those bus trips to this off-campus site, there was a person who he had never met before who used him if he could use his computer. Nick Berg lent him his computer. This man sent out an e-mail using Nick Berg's computer.

It turned out that according to his father this was a terrorist person. A year ago the FBI came and conducted an investigation, which Nick Berg's father said he participated in fully, and that he was entirely cleared. I think the central question here is, did this possible FBI investigation or terrorist connection someplace in Oklahoma have anything to do with the fact that Nick Berg was held for 13 days in Iraq? And we still don't know that yet -- Lou.

DOBBS: There's much we, obviously, don't know yet about this story and many questions surrounding the enigma at this point. Maria, thank you very much -- Maria Hinojosa reporting from West Chester, Pennsylvania.

Still ahead here, U.S. troops and insurgents battling for control of Iraq's major cities. General David Grange joins us next in "Grange on Point."

In "Exporting America," two states and their governors say no to a White House campaign to stop laws that would forbid overseas outsourcing. Other states may soon follow. We'll have a special report on the return of common sense and concern for working Americans.

The world is getting darker. That's right, less sunshine reaching the Earth's surface. We'll tell you why and what a darker world might mean for life on Earth.

All of that and a great deal more still ahead. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: In Iraq, insurgents have killed two more American troops. A roadside bomb killed a soldier in Baghdad. A U.S. Marine has died of his wounds. American troops today fought fierce battles with insurgents in Karbala and Najaf.

In Najaf, soldiers supported by tanks retook a police station that had been taken over by gunmen loyal to anti-American cleric Muqtada al-Sadr. And in Karbala, troops fought new battles with gunmen after the soldiers captured an enemy stronghold and seized a large quantity of weapons and ammunition there.

As U.S. troops battle enemy gunmen in Najaf and Karbala, military commanders are trying to negotiate a deal that would end the fighting, a deal they hope would be based on the agreement that ended the seize of Fallujah, marines handing over security to a new Iraqi force that includes some insurgents.

Joining me now to talk about the new U.S. strategy in Iraq, General David Grange in "Grange On Point."

David, let me ask you, what's your thought, in Najaf, the suggestion that al-Sadr's men play prominent role, that insurgents be incorporated into a security force, in Fallujah, Baathists returning to power in significant influence, not only in the security force, but ostensibly in the city? What's your thought?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, I agree if working something out, if it's within the conditions that we and the recognized leadership of the temporary government of Iraq states.

And that is that these people cannot continue to work for Sadr if they have a negotiated peace. They are for a different Shiite leader that is supporting the security apparatus of the recognized temporary government of Iraq, and that Sadr still has to go to court for his Iraqi murder charges. It's as simple as that. If that's not part of the deal, they shouldn't do it.

DOBBS: We've moved a long way from General Mark Kimmitt's kill or capture al-Sadr to, let's talk. Is that a smart approach, in your opinion?

GRANGE: Well, you have to be careful because long term if you don't resolve it early on, as we know when a lot of these things developed almost a year ago to include weapons all over the country and letting certain factions build up capabilities that we're dealing with now, if you wait too long, you pay for it later.

So if we have the momentum, which it appears we do now, I would be very leery of how much you negotiate to the other side, which I believe is starting to feel the pressure.

DOBBS: And the reaction in your best judgment on our troops in Iraq, the 135,000 men and women there, as they are watching this change in strategy, they're, in many cases, certainly, faced with giving up ground that they have taken with blood and sweat. What do you think the impact of all of this is on their morale?

GRANGE: Well, ground taken and then given up always impacts soldiers, unless it's explained properly. Positional advantage is temporal. And sometimes it is not advantageous to stay in an area that you've taken.

But the troops need to be -- it need to be explained to the troops of why maybe some the tactics are changing somewhat. And here you have the 1st Armored Division in this case has been there over a year. They're a bit tired. And so they are looking at this very carefully about how well it is going to turn out. They have confidence in their leadership, don't take me wrong. But they want to see this thing resolved to their favor.

DOBBS: As do we all. General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: The height of hypocrisy, that's what Congressman Peter King of New York calls comments from the Vatican's foreign minister, who the Iraqi prisoner abuse scandal is worse for America than the September 11 attacks.

King, who is Catholic, said -- quote -- "If there is anyone in the world who has no right to speak on sexual abuse, it is the Vatican." The Republican lawmaker from New York state went on to say, "Whatever the United States has done to prisoners in Iraq is nothing compared to what priests and nuns did to Catholic kids for decades while the Catholic hierarchy covered it up."

Still ahead here tonight, the fight for Iraq. Former coalition adviser Larry Diamond joins me. He says the coalition's policies in Najaf are a disaster. He will be my guest next.

And fighting back on outsourcing. Two governors have decided to defend their workers instead of the trade policy of the Bush administration.

And another surprising twist in the battle over Michael Moore's latest controversial documentary. Miramax, Disney, now there's even a role for the French. Good business or is it corporate censorship? It sounds like good business.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says this country's decision to negotiate the militia of Muqtada al-Sadr is nothing short of catastrophic. Professor Larry Diamond of Stanford University served as adviser to the Coalition Provisional Authority in Iraq. He says American negotiators with radical Iraqi insurgents amount to surrender.

Professor Diamond joins us tonight from Stanford University.

It's good to have you with us.

LARRY DIAMOND, FORMER ADVISER TO COALITION PROVISIONAL AUTHORITY: Good evening, Lou.

DOBBS: Strong words, Professor, to suggest surrender here in Najaf. Do you really believe that, if we do that, that's what it amounts to?

DIAMOND: Well, let me explain what I'm saying.

What I'm saying here is that if we agree to merge Muqtada al- Sadr's Mehdi Army forces into the emerging Iraqi police and army, then I think we will be making a terrible mistake. We are, in fact, winning on the ground in Hillah, Najaf, Karbala, throughout the Shiite region. The Mehdi Army is being defeated militarily. And we don't want to give them a political victory after we have defeated them militarily.

DOBBS: Well, in Fallujah, a similar approach taken, an Iraqi security force led by a Baathist general and other Baathist officers. Your judgment of that approach?

DIAMOND: Look, Lou, I've said repeated repeatedly we can't do everything at once.

So, I think given the circumstances we were facing in Fallujah, the fact that the resistance was more entrenched there, the fact that we would have wound up probably killing a number of civilians if we'd gone in there, it was probably the right decision to do that. But Sadr is not liked by the broad bulk of the people in Najaf and Karbala. They want him out of there. They've seen the destruction and their society as a result of his taking control.

And we are, in fact, which is to say that Iraq is, in fact, winning on the ground by expelling him. So let's finish the job there and get the surrender and defeat of the Mehdi army to a civilized political order and, very importantly, in doing so, send a message to the other militias that if they don't cooperate in a democratic political order, the same could happen to them.

DOBBS: The Iraqi prisoner abuse scandal, seven soldiers now facing court-martial. The prospect of it -- at least two others, apparently, imminent. Who do you believe should be held responsible for that? How significant do you think it is that everyone involved be held accountable?

DIAMOND: Well, it's vital that everyone involved be held accountable. Since I'm not privy to the evidence, I can't say who that should be, but the one thing that I think anyone could say is that those who should be held responsible are not only those who actually committed the acts, but those who failed to exercise due diligence and, indeed, vigilance in overseeing this problem and in responding to the first hints of evidence that there was a problem. I'd say anybody in the chain of command going all the way up to the secretary of defense who knew of this and did not act vigilantly and aggressive to address the problem and the -- end the abuse at the first sign of trouble needs to be held accountable.

DOBBS: Are you saying that Secretary Rumsfeld should resign?

DIAMOND: I think he should resign for different reasons before we even talk about Abu Ghraib. That is our post-war engagement with Iraq has been bungled badly. We haven't put in nearly enough troops. As I said before, we needed probably twice the number of troops we've had. We needed far more resources. I think the Pentagon leadership has to be held accountable for that broader failure of leadership and planning.

DOBBS: Let me ask you this boldly if I may. When you're advising the coalition provisional authority, what was the reaction when you're making such counsel?

DIAMOND: Lou, I'm a specialist on democracy. I had to become more aware of the security situation because of the realities I was confronting on the ground as I moved around the country trying to promote democracy. It wasn't my job to advise on the security aspects, but I can say that when I suggested shortly before I left that we needed to send the United States marines in to Hela (ph), Najaf, Karbala to prevent the kind of disaster that began to unfold a few days later, I was told there weren't any troops. It wasn't possible.

DOBBS: Democracy in Iraq. Is it a lost cause?

DIAMOND: I don't think it's a lost cause. Certainly, the Iraqi people don't want it to be a lost cause. They're very passionate in knowing that they want their rights protected and knowing that they want to be able to elect their government. This is something they care about deeply, but I also think we need to be realistic about the time it's going to take and about the fact that if we don't restore security in the country so that parties can campaign and voters can register and vote free of intimidations, then there's just no hope of free and fair elections.

DOBBS: Professor Larry Diamond, Stanford University. Good to have you with us.

DIAMOND: Thank you, Lou.

DOBBS: That brings us to the subject of tonight's poll. The question, how do you believe the United States should deal with Muqtada al-Sadr? Capture or kill as General Mark Kimmitt enunciated or negotiate as appears to be the case now? Cast your vote at CNN.com/lou. The results will be later in the broadcast.

In Gaza, the latest in a series of deadly attacks. An Israeli Apache helicopter opened fire over the Rafa (ph) refugee camp in southern Gaza. At least three people were wounded. That attack came two hours after two other Israeli helicopter attacks. Ten people were killed in those attacks.

Taking a look at your thoughts. Many of you writing in to condemn the murder and mutilation of American Nick Berg and the Iraqi prison abuse scandal. Karl Hildebrand of Morgantown, West Virginia. "We should be more outraged with the beheading of an innocent American than the undressing and embarrassment of terrorists.

Shane in La Grange Park, Illinois. "Lou, what has happened to Mr. Berg is one of the worst things I've ever seen. More now than ever we must stay the course and keep up the fight. If we do not stand up against these evil bullies, who will?"

Bob Harris of Bartlett, Illinois. "It is time for a measured withdrawal from Iraq. This has become an unwinnable war."

William Latz in Austin, Texas. "Why isn't anyone calling those militants what they are. Cowards. They are all covering their faces, afraid to be identified with their cause."

Peter Serano of Roseville, California. "Lou, the Iraqi people will not be willing to fight for their freedom if we are willing to die for them."

We appreciate hearing from you. Email us at loudobbs@cnn.com.

Coming up next here, states fighting for the right to protect their worker from overseas outsourcing even when it's endorsed by big business, big government and the Bush administration. Two governors say no to pressure from the Bush administration. We'll have that story coming up.

Censorship, elaborate publicity stunt, great business. Well, Michael Moore, Disney, and Miramax at the center of controversy once again.

And a darker day has apparently dawned around the world. Scientists say less and less sunlight shining through on this planet. We'll have that special report next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In "Exporting America" tonight fighting back against a White House effort to block anti-outsourcing legislation. As Lisa Sylvester reported here last week, U.S. trade representative is lobbying all 50 governors that that trade rules that would guarantee foreign companies equal access to state government contracts. Now, governors are becoming upset by outsourcing and they're starting to say no way. Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): From Iowa to Pennsylvania, backlash against the Bush White House and its trade policies. It started when the president's man on trade, Robert Zoellick lobbied all 50 governors seeking their, quote, "voluntary commitment" to agree to procurement rules that mean, quote, "treating foreign suppliers in the same manner as domestic suppliers." In other words, just say no to the anti-outsourcing backlash and let foreign companies compete for state contracts.

LORI WALLACH, PUBLIC CITIZEN: What's at stake is whether or not the different states and enough taxpayers in the states will decide how our tax dollars are spent, or whether we're going to have global one size fits all rules. To some degree that may be the ideology the White House is for. I doubt that many Americans would favor that.

VILES: Originally the state of Pennsylvania agreed to the White House policy but then this week Governor Ed Rendell wrote saying to Zoellick saying, quote, "I was elected to ensure the prosperity and stability of Pennsylvania, I am rescinding my agreement." Politicians responding to the outrage that results when state money supports outsourcing.

MICHAEL VEON (D), PENNSYLVANIA STATE HOUSE: It really is adding insult to injury. You lose your job because the job is outsourced overseas. The insult is the company who did it is being paid taxpayers' dollars on a state contract. So it's adding insult to injury and people are outraged about it.

VILES: Also saying no to the White House on this, Iowa Governor Tom Vilsack saying he needs every tool available to help workers in his state.

(END VIDEOTAPE)

VILES: In the meantime, the Bush administration continues to negotiate these trade deals at rapid clip. It will sign two of them this month. Free trade with Australia next week and CAFTA, covering Central America, later in the month. Both of those require congressional approval, Lou.

DOBBS: Well, let's hope that a new day is dawning in this country. In my opinion, I just do not understand how a governor, representing the residents of the states, can agree with this nonsense.

VILES: Well, our understanding is about half of them have not yet agreed to it, about half have. A lot are grandfather deals, states had agreed to this years and years ago before outsourcing caught on and the jobs really started going overseas. It will be interesting to see, in the next couple of days, how many governors say, take my state off that list.

DOBBS: In my opinion, any governor that signs up for this deal is ridiculous. You're sitting there abdicating your responsibilities, turning over further responsibilities to the federal government and an administration that appears hell bent to outsource American jobs, because they think it is good for the economy.

With an election coming up, I sure hope working men and women in this country are paying a lot of attention to who is with them and who is against them. What do you think?

VILES: We'll find out in the next couple days. The argument in favor of signing this deal is superfluous. The federal government has already got deals with other federal governments who can bid on what. The state governments really don't need to be in the good on whether you can bid on a state contract in Australia or state contract in the United States.

DOBBS: Well, they sure as heck need to maintain their independence from those who want to diminish U.S. sovereignty. Peter Viles, thanks a lot.

As Pete just reported, Iowa and Pennsylvania have pulled out of that procurement agreement portion of the trade agreements. According to "Public Citizen," there are 25 states that continue to support the U.S. trade representative's effort to undermine the state's anti- outsourcing positions and legislation. The other 23 states have not signed on to that agreement. On Capitol Hill today, Democratic Congressman Edward Markey of Massachusetts entered his legislation that would block companies from spending consumer's personal information out of this country. The Markey Bill would require any company to notify its customers and receive their approval and consent before sending their personal information to foreign countries. It would also offer consumers the option to offer shipping of their personal data to any foreign country. It's a beginning.

Disney tonight, reportedly selling the controversial new Michael Moore documentary to Miramax films. Disney blocked distribution of the film, citing sensitive political charged content in an election year. They obviously did not know that this was an election year when the introduced the movie.

Now Miramax co-chairman Bob and Harvey Weinstein are offering Disney millions of dollars for ownership of the film. Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The Michael Moore film has plenty of twists and turns. And we're not talking about the plot, but the distribution. Disney banned Miramax, its subsidiary, from distributing the film, which is critical of President Bush, but now, reportedly, appears ready to sell it for $5 million to $6 million to Harvey and Bob Weinstein of Miramax. They would then be free to fin another company to distribute it.

Independent film makers and media critics blasted Disney for blocking the distribution on charges they were pandering to the Bush administration.

NELSON GEORGE, INDEPENDENT FEATURE PROJECT: Any time you do something that's provocative or challenges the status quo, you're always in danger of running into these walls. And this is -- this is an extreme example of that problem.

PILGRIM: Moore, a master publicist, has made about as much as he can over the Disney dispute. Analysts say it can't help but build cache for the film, especially at the Cannes Film Festival where the critical tone of the Bush administration is expected to help it go over well.

PORTER BIBB, MEDIA ANALYST: This one is likely to become the focal point of the Cannes Film Festival, partly because of all the publicity, partly because it will be perceived as anti-Bush. And in France, that's probably a good posture to take today. And I think that it will get snapped up in Europe by distributors and probably play to a big audience.

PILGRIM: Michael Moore has won at Cannes before. His documentary, "Bowling For Columbine" won a special jury prize in France and then won an Academy Award.

(END VIDEOTAPE) PILGRIM: Now, last week Michael Moore went on a media rant about Disney. Now he's not talking. And according to his publicist, he's putting finishing touches on the documentary. They say the film will speak for itself, Lou.

DOBBS: You know, the idea that Michael Moore is not talking is just -- that in itself is a news break.

PILGRIM: It might be difficult.

DOBBS: But everyone should know -- I mean, Michael Moore has known for how long that Disney would not be distributing this movie?

PILGRIM: More than six months, probably a year. And that's where the Disney and Michael Moore spin...

DOBBS: Do you suppose Miramax and Michael Moore noticed just how well "The Passion" did with Hollywood trying to suppress the movie, refusing to distribute it?

PILGRIM: Controversy sells.

(LAUGHTER)

DOBBS: Kitty, thanks a lot. Kitty Pilgrim.

Tonight's thought is on censorship, "censorship always defeats its own purpose for it creates, in the end, the kind of society that is incapable of exercising real discretion." Those are the words of Henry Steele Commager.

And Kitty, you have a follow up tonight on a report on college tuition.

PILGRIM: That's exactly right, Lou. We reported on private and state college tuition and fees. And both have seen astronomical gains. Unfortunately, though, we reversed the numbers. Here are the correct ones. According to the College Board, which published a report, state college costs increased 14 percent, private colleges costs were up 6 percent last year -- Lou.

DOBBS: Well, that was really more -- I said a comment. It was really more of a correction wasn't it?

PILGRIM: It was a correction.

DOBBS: Thank you very much. Kitty Pilgrim, thanks a lot.

Coming up next, "Making the Grade," rising tuition costs mean rising debt for too many in this country's college students. We'll have a special report for you.

And a disturbing trend, scientists have found that the earth is becoming darker and darker.

And what a view: a spaceship rocketed to a new record altitude that could usher in a new era in private space flight. We'll have that exciting development next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Amazing pictures from South Central Kansas where storms triggered tornadoes in at least three counties. The full force of the tornado ripped apart an entire farmhouse caught on videotape. That is the farmhouse being lifted by the force of the tornado.

Several other homes and buildings also damaged but, fortunately, there were no reports of injuries. The National Weather Service said it had early reports this time of 9 tornado sightings in one county alone.

You've probably heard of global warming, but there is another concern of scientists tonight, global dimming. It turns out fewer of the sun's rays are reaching the surface of the Earth. And that may be beginning to have an impact on our climate.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Scientists have been measuring the sun's brightness for more than four decades. Their findings show a dramatic decline in the amount of sunlight hitting the Earth.

BEATE LIEPERT, LAMONT OBSERVATORY: The amount of sunlight coming in that we see on the ground has gotten less. It really has gotten less by about 4 percent in 30 years.

DOBBS: In some parts of the world, the decline has been greater. Hong Kong has lost 37 percent of its sunshine. And across the United States, the actual reduction in light is twice what scientists expected.

This is what they say is happening: pollution deflecting solar radiation that would normally enter the Earth's atmosphere. Clouds are the second component of the change. With more water condensing because of pollution deflecting solar radiation that would normally enter the earth's atmosphere. Clouds are the second component of the change. With no water condensing because of the pollution, clouds are darker and reflecting more light from earth. The same thing is happening with fog. It's heavier than it was 40 years ago. And scientists say the changes are affecting our climate.

VEERABHADRAN RAMANATHAN, SCRIPPS INST. OF OCEANOGRAPHY: The sunlight reduction has important implications than rainfall. The energy that gives us rain. So if you reduce the sunlight, our model suggests you will reduce rainfall.

DOBBS: And scientists need to assess further whether greenhouse gases are also contributing to the dimming of our planet.

(END VIDEOTAPE)

DOBBS: California Design Team a step closer to becoming the first private company to send a person into pace. Aviation pioneer Burt Rutan and his firm called Scaled Composites, today, set a new civilian altitude record of 40 miles with spaceship one. This craft was carried 50,000 feet by the so called white knight aircraft, before they separated, and then rocketed into the stratosphere. After landing back on earth, 62-year-old pilot, that's right, 62-year-old pilot, Mike Melville said he would pay $1 million to do it over again. He may have a chance to do it sooner than he thinks and at somewhat considerably less cost. Scaled Composites is one of 24 companies competing for the X-prize, a 10 million dollar reward for the first private funded group that will send three people on a sub orbital space flight.

Still ahead, making the grade. The Pell Grant Program, created to help low income students, but it's not keeping up with the rising cost of a college education, leaving the students behind and their families trying to finance an education while their budgets are severely burdened. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Startling increases in college tuition, leaving low income students with growing levels of debt. The Federal Pell Grant Program has had few adjustments since it began back in 1975. Now, there are calls for the program to keep pace.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Luis Torres is a junior at Georgetown where the room and board is more than $42,000 a year. He's receiving the maximum Federal Pell Grant of just over $4,000 a year. It barely makes a dent.

LUIS TORRES, JUNIOR, GEORGETOWN UNIVERSITY: I have a work study job. I tutor. I do as much as I can to bring in extra income.

SYLVESTER: Two decades ago the average Pell Grant covered 84 percent of the cost of attending a four-year public or college university. Today it's lucky if it covers 40 percent of the costs.

SANDY BAUM, SKIDMORE COLLEGE: Unfortunately there are students not going to college or not enrolling in a four-year college or college of their choice because of inadequate recourses.

SYLVESTER (on camera): Pell Grants have not kept up with inflation. At the same time, tuition rates have soared. To make up the difference, more students are borrowing money.

(voice-over): According to a survey by student loan company Nellie Mae, a graduate will have $19,000 in debt, up 66 percent since 1997. A new Jersey Senator Corzine is fighting to expand Pell Grant aid.

SEN. JON CORZINE (D), NEW JERSEY: It is important to America's economy. It's also important to have that upward mobility that's been a part of the American promise. SYLVESTER: Luis Torres hopes to have a master's degree in sociology, and teach or work for the government he's finding good grades are not enough if he doesn't have money to pay for college.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: A mixed day on Wall Street. The Dow down 34 points. The Nasdaq added less than a point. Well, the S&P 500 not worth mentioning, down just about a point. Oil prices are worth mentioning. An all-time high in after how trading topping $41 a barrel. Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Indeed worth mentioning. Those energy prices are really a squeeze on the middle class, Lou. And Wal-Mart CEO Lee Scott is concerned. He says record gas prices are sucking $7 a week out of his customers' pockets, that's $7 less to spend on groceries and cheap Chinese toys. Analyst say the average Wal-Mart shopper makes $40,000 a year. So, $7 a week for 10s of millions of American families that's significant. Now, energy prices make it more expensive for Wal-Mart to ship goods at a time when its expansion is slowing. Piper Jaffray has a hold on Wal-Mart shares, Lou, in part because of mounting community resistance to Wal-Mart's blue box cheap stuff stores. But Wal-Mart is tweaking its strategy, adding Dunkin Doughnuts. It has groceries, nail salons. It's ironic, a lot of the analyst say, because it was Wal-Mart, Lou, that was almost sounding the death nail for the American shopping mall. And Wal-Mart is looking more like an American shopping mall.

DOBBS: Absolutely. Christine, thanks. Christine Romans.

When we continue, the results of our poll tonight. We'll continue in just a moment. Our director and producer will be on high alert as we do.

(COMMERCIAL BREAK)

DOBBS: The results of our poll, 58 percent of you say, the United States should we should capture or kill Muqtada al Sadr, and 42 say we should negotiate.

That's the broadcast for tonight.

Tomorrow, Governor Rendell of Pennsylvania, standing up to pressure from the White House over controversial trade policies. He will be our guest.

Please join us. For all us here good night from New York. "ANDERSON COOPER 360" coming up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired May 13, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Hello. I'm Wolf Blitzer, filling in for Lou Dobbs right now.
There were dramatic developments today in Iraq, dramatic developments involving the defense secretary, Donald Rumsfeld, and the chairman of the Joint Chiefs of Staff, Richard Myers. The defense secretary dropped in on U.S. troops in Baghdad.

the surprise visit gave him a firsthand look at a prison which has gained fresh notoriety around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It was behind these Abu Ghraib walls where U.S. soldiers abused Iraqi prisoners. And it was behind these same walls where Defense Secretary Donald Rumsfeld has now paid a hastily arranged visit.

DONALD RUMSFELD, SECRETARY OF DEFENSE: The people who engaged in abuses will be brought to justice. The world will see how a free system, a democratic system functions and operates transparently, with no cover-ups.

BLITZER: He toured the facility once used by Saddam Hussein's regime and was briefed by U.S. military commanders, before heading over to a town hall-style meeting with U.S. troops at what is called Camp Victory near the Baghdad Airport.

(CHEERING AND APPLAUSE)

BLITZER: Despite the enthusiastic reception, the specter of Abu Ghraib hovered over this event as well.

RUMSFELD: In recent days, there's been a focus on a few who have betrayed our values and sullied the reputation of our country. Like each of you, I'm sure, and like most Americans, I was stunned. It was a body blow.

BLITZER: While assuring the troops the Pentagon would get to the bottom of the investigation and punish all those involved, Rumsfeld also made clear his disdain for the news media and its coverage of the scandal.

RUMSFELD: I've stopped reading the newspapers.

(LAUGHTER) BLITZER: And despite calls for his resignation, he assured the troops he had no such intention.

RUMSFELD: It's a fact. I'm a survivor.

BLITZER: But just as Rumsfeld was trying to buck up the troops, it was also clear they were bucking him up as well. Responding to questions, he said he welcomed a new U.N. resolution that might further internationalize the military effort in Iraq and encourage, perhaps, 15 more nations to send badly needed troops there.

RUMSFELD: I'm encouraged. I think we'll find we will find that we will get additional forces.

BLITZER: For security reasons, the secretary, Joint Chiefs Chairman Richard Myers and a team of Pentagon lawyers gave no advanced notice of the overnight trip. Aboard the aircraft during the 15-hour flight, Rumsfeld denied it was simply designed to deal with the angry fallout from the prisoner abuse scandal.

RUMSFELD: If anyone thinks I'm there to throw water on a fire, they're wrong.

BLITZER: And on releasing publicly more of those prison pictures, he offered this.

RUMSFELD: My first choice would be to release them, but it's my understanding that at the present time the people who have an obligation to take into account privacy issues, legal requirements under privacy laws and Geneva Convention are advising against it.

(END VIDEOTAPE)

BLITZER: Let's get some more analysis now on what the defense secretary did today in the surprise visit to Iraq.

Let's bring in our senior Pentagon correspondent, Jamie McIntyre.

What's the sense among the officials you're speaking with over there on what happened today, Jamie?

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, the secretary himself made the point of saying that this was not an inspection tour. It wasn't a P.R. stunt. He really said he wanted to get on the ground and reassure the troops that the U.S. policy in Iraq was on track and that he, himself, was still firmly in charge, despite the calls for his head here in Washington, simply to give them a pat on the back.

Of course, while Rumsfeld was there, away from the heat of some of the questions in Washington, his deputies were up on the Hill taking more heat about the U.S. interrogation techniques, not the ones that are clearly abusive, but the ones that are approved by the Pentagon.

And Deputy Defense Secretary Paul Wolfowitz was pressed to admit that some of the things the U.S. does in the approved interrogation techniques may, in fact, violate the Geneva Conventions for the treatment of prisoners.

(BEGIN VIDEO CLIP)

SEN. JACK REED (D), RHODE ISLAND: Seventy-two hours without regular sleep, sensory deprivation, which would be a bag over your head for 72 hours, do you think that's humane? And that's what this says, a bag over your head for 72 hours. Is that humane?

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: Let me come back to what you said...

REED: No, no. Answer the question, Secretary. Is that humane?

WOLFOWITZ: I don't know whether it means a bag over your head for 72 hours, Senator. I don't know. REED: Mr. Secretary, you're non-responsive. Anybody would say putting a bag over someone's head for 72 hours, which is sensory deprivation...

WOLFOWITZ: I believe it's not humane. It strikes me as not humane, Senator.

REED: Thank you very much.

(END VIDEO CLIP)

MCINTYRE: That appeared to be somewhat of an admission from Deputy Defense Secretary Paul Wolfowitz that perhaps the techniques used by the U.S. skirt the boundaries of the Geneva Convention, while he didn't say that specifically.

These rules of course are designed to protect, of course, U.S. prisoners if they're in the hands of others. They specifically say that prisoners may not be exposed to unpleasant or disadvantageous treatment of any kind. The idea of course is this sort of golden rule, that is, treat the prisoners you have the way you would want your prisoners to be treated. And some of the members of Congress reviewing these policies by the Pentagon are convinced that that's not the case -- Wolf.

BLITZER: Jamie McIntyre at the Pentagon -- Jamie, thanks very much.

Lou Dobbs is now ready to take over. He's standing by in New York with much more -- Lou.

LOU DOBBS, CNN ANCHOR: Wolf, thank you very much for stepping in. And we appreciate it.

President Bush today met a group of House Republicans at the White House in an effort to make certain lawmakers understand the administration's policy on Iraq, admitting part of a new initiative to address congressional concerns about the prisoner abuse scandal and the political transition in Iraq.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, administration officials call this -- quote -- "Beltway disease."

They say a few Republicans joining Democrats, at least in privately grumbling to this White House that someone in the senior leadership at the Pentagon should be held accountable for all of this. On this day the White House believes it has quieted that criticism, especially among Republicans.

As you noted, the president at this hour meeting with some House members. You see him earlier in the day. The president was out in the state of West Virginia. He was hoping to focus on education in a state that he views as critical to his chances in November. But the president, of course, knows the prisoner abuse scandal dominating the discussion in Washington. He once again during this event weighed in, voicing his displeasure.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to say one other thing about our troops. Like you, I have been disgraced about what I've seen on TV, what took place in the prison. But the actions of a few do not reflect on the fantastic character of the over 200,000 men and women who have served our nation.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KING: Now, back here at the White House, the president inviting some Republican House members to spend some time with him to discuss policy in Iraq, not just the prisoner abuse scandal, but that certainly a key topic.

Administration officials believe that Secretary Rumsfeld greatly helped his cause by staging that dramatic trip to Baghdad. They said it shows to them anyway that he wants to get in front of the story, learn about the problems at the prison and make sure that those problems have now been ended. And also they believe it was critical for Secretary Rumsfeld to try to boost the morale of U.S. troops.

They also believe here at the White House, Lou, that Democrats have helped this president. So many Democrats demanding resignations, they believe that has rallied Republicans even critical of the Iraq policy to rally to the president's side.

And one more dynamic, Lou. White House officials say that dramatic, horrific video of the American, Nick Berg, being beheaded, they say that has convinced many lawmakers that this is not a time to be criticizing the commander in chief and perhaps putting those prisoner abuse pictures, as horrific as they are, in some perspective -- Lou.

DOBBS: John, as you pointed out, the administration under severe criticism from many in the Republican Party and certainly the Democratic Party for not including Congress in its reasoning, its planning, its strategy in Iraq. Does this signal a change, a more inclusive approach by an administration that to this point over the past certainly six months has been rather dismissive of the concerns of both the Senate and the House?

KING: It certainly does for now, Lou. You might want to ask that question in about two weeks. Sometimes this White House reaches out in times of crisis and then key members of Congress complain there is not sustained consulting and cooperation when things are more normal, if you will.

But the president had the chairman and the ranking Democrats of both the House and the Senate Foreign Relations, Foreign Affairs Committees here at the White House yesterday, 10 key Republican House members or so here today. More meetings planned. Additionally, Condoleezza Rice, the national security adviser, has made several trips to Capitol Hill in recent days.

So, at this moment the administration is reaching out quite aggressively. Members of Congress say they hope it continues.

DOBBS: John, thank you -- John King, senior White House correspondent.

The CIA today said al Qaeda's leader in Iraq, Abu Musab al- Zarqawi, probably the person who cut off the head of Nick Berg. The gruesome murder was shown on a video released on an Islamic Web site.

National security correspondent David Ensor reports now -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, CIA officials have done a technical analysis of the tape you mentioned showing the murder of American Nick Berg.

And as you say, they're now concluding that the hooded man who speaks first and then later on the tape can be seen killing Berg by beheading him is, with high probability, Abu Musab al-Zarqawi, the leader of the group in Iraq with a $10 million price on his head. Zarqawi is wanted for more than a score of bombings in Iraq, as well as the murder of an American diplomat in Jordan.

Officials say they now believe the terrorist leader personally killed Nick Berg. And they say that parallels with their confidence that "Wall Street Journal" reporter Danny Pearl was also beheaded by a top terrorist. In that case, it was Khalid Shaikh Mohammed, the al Qaeda leader who is the mastermind of the 9/11 attacks. Mohammed has been under interrogation by the CIA in an undisclosed location for some time now.

CIA and administration officials are refusing to comment on a report in "The New York Times" that Khalid Shaikh Mohammed has been subjected to what is called water-boarding, in which a prisoner is strapped and forcibly pushed under water and made to believe that he may be allowed to drown.

Officials do confirm however that after 9/11 the president approved new rules for interrogation of top terrorist prisoners which allowed additional forms of -- quote -- "pressure," and former officials, former officials, suggest that those include sleep deprivation, use of heat, cold, light, and loud noise.

U.S. officials draw a sharp distinction in their minds at least between what they see as the illegal abuse of Iraqi prisoners who should have been protected under the Geneva Conventions by soldiers in Iraq who they say were acting without authority, and on the other hand the CIA's use of pressure on al Qaeda prisoners which they stress has been very specifically authorized in writing by the White House and by the Justice Department -- Lou.

DOBBS: Any indication that the CIA using language like high probability, with all of the sophisticated technical capacity, can move to certainty on al-Zarqawi?

ENSOR: Very difficult. The quality of the tape is not ideal. It was, of course, fed over the Internet. It is a little murky in places.

But high probability suggests they're reasonably sure they're right. Now, in fairness, some other Arabic-language speakers who have looked at the tape are not so sure. But here you have the nation's premier intelligence agency saying they believe it is Zarqawi.

DOBBS: We don't have to be fair and balanced on this one, David. If the CIA can come up with high probability and perhaps certainty, that should be sufficient.

Let me ask you, any sense from the CIA, other military intelligence or State Department intelligence, other agencies that there is any chance in the world of quickly finding leads to Zarqawi?

ENSOR: You know, officials do say that they do have some leads, but you saw how long it took to find Saddam Hussein. This is a very elusive and clever character. As you mentioned earlier, with al Qaeda ties, he has plenty of wherewithal. It is going to be very, very difficult. And if they have good leads, they're not telling the likes of us.

DOBBS: That almost sounds like a suggestion, David, I know you don't mean it, that they have sufficient resources to withstand the might of the U.S. military, intelligence community, all of the capital resources of this country and our resources in intelligence. Difficult perhaps, but shouldn't all of those resources be arrayed against them?

ENSOR: Well, there's a $10 million reward for the capture or information leading to the capture of Abu Musab al-Zarqawi He is certainly moving up the list of most wanted rapidly at this point.

And you can imagine that a lot of resources are going into that hunt. So they believe they may find him. And if they do, there are a lot of questions they have for him. That's putting it mildly.

DOBBS: David, thank you very much -- David Ensor, our national security correspondent.

Nick Berg's father, Michael Berg, today said the terrorists who killed his son did not realize he was in Iraq to help rebuild their country. The family has also released e-mails from U.S. government officials that the family says proves Berg was in U.S. military custody.

Maria Hinojosa reports from Nick Berg's hometown of West Chester, Pennsylvania -- Maria.

MARIA HINOJOSA, CNN CORRESPONDENT: Lou, finally after three days of silence and seclusion, the mournful father of Nick Berg speaks out today. But there weren't tears. There were just very pointed accusations.

(BEGIN VIDEO CLIP)

MICHAEL BERG, FATHER OF NICK BERG: Nicholas Berg died for the sins of George Bush and Donald Rumsfeld. The al Qaeda people are probably just as bad as they are.

(END VIDEO CLIP)

HINOJOSA: Throughout the day, Lou, there were cards and flowers that continued to arrive here from all over the world. His father saying he feels like he's a citizen of the world. Perhaps his son was as well.

But in Iraq, there was more information about where Nick Berg was in his final days. Today, CNN was able to confirm that we spoke to the police chief in Mosul, Iraq, who said that in fact they had taken in Nick Berg, but that within a few hours, they had given him over to military forces, U.S. military forces, in Iraq.

Now, the United States continues to deny that he was ever in their custody. CNN also spoke to friends of Nick Berg who saw him in Iraq after he was released from detention. And they were saying that he had said that he was in U.S. custody under coalition protection in some kind of detention center. Another friend of his, a gym owner, said that Nick Berg never seemed afraid.

(BEGIN VIDEO CLIP)

SABAH TALEB MEHDI, GYM OWNER (through translator): He never appeared to care about the warnings or danger. He used to walk like he was in Washington or somewhere like that he knew.

(END VIDEO CLIP)

HINOJOSA: Now, this, Lou, of course, a lot of difficult information for this family to process as they prepare to say goodbye to their son tomorrow with a private family funeral and then a public memorial, not open entirely to the public, but to Nick Berg's family and close friends -- Lou.

DOBBS: Maria, what can you tell us about the information that Nick Berg apparently had some sort of encounter with what are termed terrorist people in Oklahoma? What do you know about that?

HINOJOSA: This is one of the questions that Nick Berg's father answered today.

Apparently, there was a period of time, A short period of time when Nick Berg was studying at the Oklahoma University. And there was an off-cam pause site he used to take a bus trip to. On one of those bus trips to this off-campus site, there was a person who he had never met before who used him if he could use his computer. Nick Berg lent him his computer. This man sent out an e-mail using Nick Berg's computer.

It turned out that according to his father this was a terrorist person. A year ago the FBI came and conducted an investigation, which Nick Berg's father said he participated in fully, and that he was entirely cleared. I think the central question here is, did this possible FBI investigation or terrorist connection someplace in Oklahoma have anything to do with the fact that Nick Berg was held for 13 days in Iraq? And we still don't know that yet -- Lou.

DOBBS: There's much we, obviously, don't know yet about this story and many questions surrounding the enigma at this point. Maria, thank you very much -- Maria Hinojosa reporting from West Chester, Pennsylvania.

Still ahead here, U.S. troops and insurgents battling for control of Iraq's major cities. General David Grange joins us next in "Grange on Point."

In "Exporting America," two states and their governors say no to a White House campaign to stop laws that would forbid overseas outsourcing. Other states may soon follow. We'll have a special report on the return of common sense and concern for working Americans.

The world is getting darker. That's right, less sunshine reaching the Earth's surface. We'll tell you why and what a darker world might mean for life on Earth.

All of that and a great deal more still ahead. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: In Iraq, insurgents have killed two more American troops. A roadside bomb killed a soldier in Baghdad. A U.S. Marine has died of his wounds. American troops today fought fierce battles with insurgents in Karbala and Najaf.

In Najaf, soldiers supported by tanks retook a police station that had been taken over by gunmen loyal to anti-American cleric Muqtada al-Sadr. And in Karbala, troops fought new battles with gunmen after the soldiers captured an enemy stronghold and seized a large quantity of weapons and ammunition there.

As U.S. troops battle enemy gunmen in Najaf and Karbala, military commanders are trying to negotiate a deal that would end the fighting, a deal they hope would be based on the agreement that ended the seize of Fallujah, marines handing over security to a new Iraqi force that includes some insurgents.

Joining me now to talk about the new U.S. strategy in Iraq, General David Grange in "Grange On Point."

David, let me ask you, what's your thought, in Najaf, the suggestion that al-Sadr's men play prominent role, that insurgents be incorporated into a security force, in Fallujah, Baathists returning to power in significant influence, not only in the security force, but ostensibly in the city? What's your thought?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, I agree if working something out, if it's within the conditions that we and the recognized leadership of the temporary government of Iraq states.

And that is that these people cannot continue to work for Sadr if they have a negotiated peace. They are for a different Shiite leader that is supporting the security apparatus of the recognized temporary government of Iraq, and that Sadr still has to go to court for his Iraqi murder charges. It's as simple as that. If that's not part of the deal, they shouldn't do it.

DOBBS: We've moved a long way from General Mark Kimmitt's kill or capture al-Sadr to, let's talk. Is that a smart approach, in your opinion?

GRANGE: Well, you have to be careful because long term if you don't resolve it early on, as we know when a lot of these things developed almost a year ago to include weapons all over the country and letting certain factions build up capabilities that we're dealing with now, if you wait too long, you pay for it later.

So if we have the momentum, which it appears we do now, I would be very leery of how much you negotiate to the other side, which I believe is starting to feel the pressure.

DOBBS: And the reaction in your best judgment on our troops in Iraq, the 135,000 men and women there, as they are watching this change in strategy, they're, in many cases, certainly, faced with giving up ground that they have taken with blood and sweat. What do you think the impact of all of this is on their morale?

GRANGE: Well, ground taken and then given up always impacts soldiers, unless it's explained properly. Positional advantage is temporal. And sometimes it is not advantageous to stay in an area that you've taken.

But the troops need to be -- it need to be explained to the troops of why maybe some the tactics are changing somewhat. And here you have the 1st Armored Division in this case has been there over a year. They're a bit tired. And so they are looking at this very carefully about how well it is going to turn out. They have confidence in their leadership, don't take me wrong. But they want to see this thing resolved to their favor.

DOBBS: As do we all. General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: The height of hypocrisy, that's what Congressman Peter King of New York calls comments from the Vatican's foreign minister, who the Iraqi prisoner abuse scandal is worse for America than the September 11 attacks.

King, who is Catholic, said -- quote -- "If there is anyone in the world who has no right to speak on sexual abuse, it is the Vatican." The Republican lawmaker from New York state went on to say, "Whatever the United States has done to prisoners in Iraq is nothing compared to what priests and nuns did to Catholic kids for decades while the Catholic hierarchy covered it up."

Still ahead here tonight, the fight for Iraq. Former coalition adviser Larry Diamond joins me. He says the coalition's policies in Najaf are a disaster. He will be my guest next.

And fighting back on outsourcing. Two governors have decided to defend their workers instead of the trade policy of the Bush administration.

And another surprising twist in the battle over Michael Moore's latest controversial documentary. Miramax, Disney, now there's even a role for the French. Good business or is it corporate censorship? It sounds like good business.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says this country's decision to negotiate the militia of Muqtada al-Sadr is nothing short of catastrophic. Professor Larry Diamond of Stanford University served as adviser to the Coalition Provisional Authority in Iraq. He says American negotiators with radical Iraqi insurgents amount to surrender.

Professor Diamond joins us tonight from Stanford University.

It's good to have you with us.

LARRY DIAMOND, FORMER ADVISER TO COALITION PROVISIONAL AUTHORITY: Good evening, Lou.

DOBBS: Strong words, Professor, to suggest surrender here in Najaf. Do you really believe that, if we do that, that's what it amounts to?

DIAMOND: Well, let me explain what I'm saying.

What I'm saying here is that if we agree to merge Muqtada al- Sadr's Mehdi Army forces into the emerging Iraqi police and army, then I think we will be making a terrible mistake. We are, in fact, winning on the ground in Hillah, Najaf, Karbala, throughout the Shiite region. The Mehdi Army is being defeated militarily. And we don't want to give them a political victory after we have defeated them militarily.

DOBBS: Well, in Fallujah, a similar approach taken, an Iraqi security force led by a Baathist general and other Baathist officers. Your judgment of that approach?

DIAMOND: Look, Lou, I've said repeated repeatedly we can't do everything at once.

So, I think given the circumstances we were facing in Fallujah, the fact that the resistance was more entrenched there, the fact that we would have wound up probably killing a number of civilians if we'd gone in there, it was probably the right decision to do that. But Sadr is not liked by the broad bulk of the people in Najaf and Karbala. They want him out of there. They've seen the destruction and their society as a result of his taking control.

And we are, in fact, which is to say that Iraq is, in fact, winning on the ground by expelling him. So let's finish the job there and get the surrender and defeat of the Mehdi army to a civilized political order and, very importantly, in doing so, send a message to the other militias that if they don't cooperate in a democratic political order, the same could happen to them.

DOBBS: The Iraqi prisoner abuse scandal, seven soldiers now facing court-martial. The prospect of it -- at least two others, apparently, imminent. Who do you believe should be held responsible for that? How significant do you think it is that everyone involved be held accountable?

DIAMOND: Well, it's vital that everyone involved be held accountable. Since I'm not privy to the evidence, I can't say who that should be, but the one thing that I think anyone could say is that those who should be held responsible are not only those who actually committed the acts, but those who failed to exercise due diligence and, indeed, vigilance in overseeing this problem and in responding to the first hints of evidence that there was a problem. I'd say anybody in the chain of command going all the way up to the secretary of defense who knew of this and did not act vigilantly and aggressive to address the problem and the -- end the abuse at the first sign of trouble needs to be held accountable.

DOBBS: Are you saying that Secretary Rumsfeld should resign?

DIAMOND: I think he should resign for different reasons before we even talk about Abu Ghraib. That is our post-war engagement with Iraq has been bungled badly. We haven't put in nearly enough troops. As I said before, we needed probably twice the number of troops we've had. We needed far more resources. I think the Pentagon leadership has to be held accountable for that broader failure of leadership and planning.

DOBBS: Let me ask you this boldly if I may. When you're advising the coalition provisional authority, what was the reaction when you're making such counsel?

DIAMOND: Lou, I'm a specialist on democracy. I had to become more aware of the security situation because of the realities I was confronting on the ground as I moved around the country trying to promote democracy. It wasn't my job to advise on the security aspects, but I can say that when I suggested shortly before I left that we needed to send the United States marines in to Hela (ph), Najaf, Karbala to prevent the kind of disaster that began to unfold a few days later, I was told there weren't any troops. It wasn't possible.

DOBBS: Democracy in Iraq. Is it a lost cause?

DIAMOND: I don't think it's a lost cause. Certainly, the Iraqi people don't want it to be a lost cause. They're very passionate in knowing that they want their rights protected and knowing that they want to be able to elect their government. This is something they care about deeply, but I also think we need to be realistic about the time it's going to take and about the fact that if we don't restore security in the country so that parties can campaign and voters can register and vote free of intimidations, then there's just no hope of free and fair elections.

DOBBS: Professor Larry Diamond, Stanford University. Good to have you with us.

DIAMOND: Thank you, Lou.

DOBBS: That brings us to the subject of tonight's poll. The question, how do you believe the United States should deal with Muqtada al-Sadr? Capture or kill as General Mark Kimmitt enunciated or negotiate as appears to be the case now? Cast your vote at CNN.com/lou. The results will be later in the broadcast.

In Gaza, the latest in a series of deadly attacks. An Israeli Apache helicopter opened fire over the Rafa (ph) refugee camp in southern Gaza. At least three people were wounded. That attack came two hours after two other Israeli helicopter attacks. Ten people were killed in those attacks.

Taking a look at your thoughts. Many of you writing in to condemn the murder and mutilation of American Nick Berg and the Iraqi prison abuse scandal. Karl Hildebrand of Morgantown, West Virginia. "We should be more outraged with the beheading of an innocent American than the undressing and embarrassment of terrorists.

Shane in La Grange Park, Illinois. "Lou, what has happened to Mr. Berg is one of the worst things I've ever seen. More now than ever we must stay the course and keep up the fight. If we do not stand up against these evil bullies, who will?"

Bob Harris of Bartlett, Illinois. "It is time for a measured withdrawal from Iraq. This has become an unwinnable war."

William Latz in Austin, Texas. "Why isn't anyone calling those militants what they are. Cowards. They are all covering their faces, afraid to be identified with their cause."

Peter Serano of Roseville, California. "Lou, the Iraqi people will not be willing to fight for their freedom if we are willing to die for them."

We appreciate hearing from you. Email us at loudobbs@cnn.com.

Coming up next here, states fighting for the right to protect their worker from overseas outsourcing even when it's endorsed by big business, big government and the Bush administration. Two governors say no to pressure from the Bush administration. We'll have that story coming up.

Censorship, elaborate publicity stunt, great business. Well, Michael Moore, Disney, and Miramax at the center of controversy once again.

And a darker day has apparently dawned around the world. Scientists say less and less sunlight shining through on this planet. We'll have that special report next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In "Exporting America" tonight fighting back against a White House effort to block anti-outsourcing legislation. As Lisa Sylvester reported here last week, U.S. trade representative is lobbying all 50 governors that that trade rules that would guarantee foreign companies equal access to state government contracts. Now, governors are becoming upset by outsourcing and they're starting to say no way. Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): From Iowa to Pennsylvania, backlash against the Bush White House and its trade policies. It started when the president's man on trade, Robert Zoellick lobbied all 50 governors seeking their, quote, "voluntary commitment" to agree to procurement rules that mean, quote, "treating foreign suppliers in the same manner as domestic suppliers." In other words, just say no to the anti-outsourcing backlash and let foreign companies compete for state contracts.

LORI WALLACH, PUBLIC CITIZEN: What's at stake is whether or not the different states and enough taxpayers in the states will decide how our tax dollars are spent, or whether we're going to have global one size fits all rules. To some degree that may be the ideology the White House is for. I doubt that many Americans would favor that.

VILES: Originally the state of Pennsylvania agreed to the White House policy but then this week Governor Ed Rendell wrote saying to Zoellick saying, quote, "I was elected to ensure the prosperity and stability of Pennsylvania, I am rescinding my agreement." Politicians responding to the outrage that results when state money supports outsourcing.

MICHAEL VEON (D), PENNSYLVANIA STATE HOUSE: It really is adding insult to injury. You lose your job because the job is outsourced overseas. The insult is the company who did it is being paid taxpayers' dollars on a state contract. So it's adding insult to injury and people are outraged about it.

VILES: Also saying no to the White House on this, Iowa Governor Tom Vilsack saying he needs every tool available to help workers in his state.

(END VIDEOTAPE)

VILES: In the meantime, the Bush administration continues to negotiate these trade deals at rapid clip. It will sign two of them this month. Free trade with Australia next week and CAFTA, covering Central America, later in the month. Both of those require congressional approval, Lou.

DOBBS: Well, let's hope that a new day is dawning in this country. In my opinion, I just do not understand how a governor, representing the residents of the states, can agree with this nonsense.

VILES: Well, our understanding is about half of them have not yet agreed to it, about half have. A lot are grandfather deals, states had agreed to this years and years ago before outsourcing caught on and the jobs really started going overseas. It will be interesting to see, in the next couple of days, how many governors say, take my state off that list.

DOBBS: In my opinion, any governor that signs up for this deal is ridiculous. You're sitting there abdicating your responsibilities, turning over further responsibilities to the federal government and an administration that appears hell bent to outsource American jobs, because they think it is good for the economy.

With an election coming up, I sure hope working men and women in this country are paying a lot of attention to who is with them and who is against them. What do you think?

VILES: We'll find out in the next couple days. The argument in favor of signing this deal is superfluous. The federal government has already got deals with other federal governments who can bid on what. The state governments really don't need to be in the good on whether you can bid on a state contract in Australia or state contract in the United States.

DOBBS: Well, they sure as heck need to maintain their independence from those who want to diminish U.S. sovereignty. Peter Viles, thanks a lot.

As Pete just reported, Iowa and Pennsylvania have pulled out of that procurement agreement portion of the trade agreements. According to "Public Citizen," there are 25 states that continue to support the U.S. trade representative's effort to undermine the state's anti- outsourcing positions and legislation. The other 23 states have not signed on to that agreement. On Capitol Hill today, Democratic Congressman Edward Markey of Massachusetts entered his legislation that would block companies from spending consumer's personal information out of this country. The Markey Bill would require any company to notify its customers and receive their approval and consent before sending their personal information to foreign countries. It would also offer consumers the option to offer shipping of their personal data to any foreign country. It's a beginning.

Disney tonight, reportedly selling the controversial new Michael Moore documentary to Miramax films. Disney blocked distribution of the film, citing sensitive political charged content in an election year. They obviously did not know that this was an election year when the introduced the movie.

Now Miramax co-chairman Bob and Harvey Weinstein are offering Disney millions of dollars for ownership of the film. Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The Michael Moore film has plenty of twists and turns. And we're not talking about the plot, but the distribution. Disney banned Miramax, its subsidiary, from distributing the film, which is critical of President Bush, but now, reportedly, appears ready to sell it for $5 million to $6 million to Harvey and Bob Weinstein of Miramax. They would then be free to fin another company to distribute it.

Independent film makers and media critics blasted Disney for blocking the distribution on charges they were pandering to the Bush administration.

NELSON GEORGE, INDEPENDENT FEATURE PROJECT: Any time you do something that's provocative or challenges the status quo, you're always in danger of running into these walls. And this is -- this is an extreme example of that problem.

PILGRIM: Moore, a master publicist, has made about as much as he can over the Disney dispute. Analysts say it can't help but build cache for the film, especially at the Cannes Film Festival where the critical tone of the Bush administration is expected to help it go over well.

PORTER BIBB, MEDIA ANALYST: This one is likely to become the focal point of the Cannes Film Festival, partly because of all the publicity, partly because it will be perceived as anti-Bush. And in France, that's probably a good posture to take today. And I think that it will get snapped up in Europe by distributors and probably play to a big audience.

PILGRIM: Michael Moore has won at Cannes before. His documentary, "Bowling For Columbine" won a special jury prize in France and then won an Academy Award.

(END VIDEOTAPE) PILGRIM: Now, last week Michael Moore went on a media rant about Disney. Now he's not talking. And according to his publicist, he's putting finishing touches on the documentary. They say the film will speak for itself, Lou.

DOBBS: You know, the idea that Michael Moore is not talking is just -- that in itself is a news break.

PILGRIM: It might be difficult.

DOBBS: But everyone should know -- I mean, Michael Moore has known for how long that Disney would not be distributing this movie?

PILGRIM: More than six months, probably a year. And that's where the Disney and Michael Moore spin...

DOBBS: Do you suppose Miramax and Michael Moore noticed just how well "The Passion" did with Hollywood trying to suppress the movie, refusing to distribute it?

PILGRIM: Controversy sells.

(LAUGHTER)

DOBBS: Kitty, thanks a lot. Kitty Pilgrim.

Tonight's thought is on censorship, "censorship always defeats its own purpose for it creates, in the end, the kind of society that is incapable of exercising real discretion." Those are the words of Henry Steele Commager.

And Kitty, you have a follow up tonight on a report on college tuition.

PILGRIM: That's exactly right, Lou. We reported on private and state college tuition and fees. And both have seen astronomical gains. Unfortunately, though, we reversed the numbers. Here are the correct ones. According to the College Board, which published a report, state college costs increased 14 percent, private colleges costs were up 6 percent last year -- Lou.

DOBBS: Well, that was really more -- I said a comment. It was really more of a correction wasn't it?

PILGRIM: It was a correction.

DOBBS: Thank you very much. Kitty Pilgrim, thanks a lot.

Coming up next, "Making the Grade," rising tuition costs mean rising debt for too many in this country's college students. We'll have a special report for you.

And a disturbing trend, scientists have found that the earth is becoming darker and darker.

And what a view: a spaceship rocketed to a new record altitude that could usher in a new era in private space flight. We'll have that exciting development next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Amazing pictures from South Central Kansas where storms triggered tornadoes in at least three counties. The full force of the tornado ripped apart an entire farmhouse caught on videotape. That is the farmhouse being lifted by the force of the tornado.

Several other homes and buildings also damaged but, fortunately, there were no reports of injuries. The National Weather Service said it had early reports this time of 9 tornado sightings in one county alone.

You've probably heard of global warming, but there is another concern of scientists tonight, global dimming. It turns out fewer of the sun's rays are reaching the surface of the Earth. And that may be beginning to have an impact on our climate.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Scientists have been measuring the sun's brightness for more than four decades. Their findings show a dramatic decline in the amount of sunlight hitting the Earth.

BEATE LIEPERT, LAMONT OBSERVATORY: The amount of sunlight coming in that we see on the ground has gotten less. It really has gotten less by about 4 percent in 30 years.

DOBBS: In some parts of the world, the decline has been greater. Hong Kong has lost 37 percent of its sunshine. And across the United States, the actual reduction in light is twice what scientists expected.

This is what they say is happening: pollution deflecting solar radiation that would normally enter the Earth's atmosphere. Clouds are the second component of the change. With more water condensing because of pollution deflecting solar radiation that would normally enter the earth's atmosphere. Clouds are the second component of the change. With no water condensing because of the pollution, clouds are darker and reflecting more light from earth. The same thing is happening with fog. It's heavier than it was 40 years ago. And scientists say the changes are affecting our climate.

VEERABHADRAN RAMANATHAN, SCRIPPS INST. OF OCEANOGRAPHY: The sunlight reduction has important implications than rainfall. The energy that gives us rain. So if you reduce the sunlight, our model suggests you will reduce rainfall.

DOBBS: And scientists need to assess further whether greenhouse gases are also contributing to the dimming of our planet.

(END VIDEOTAPE)

DOBBS: California Design Team a step closer to becoming the first private company to send a person into pace. Aviation pioneer Burt Rutan and his firm called Scaled Composites, today, set a new civilian altitude record of 40 miles with spaceship one. This craft was carried 50,000 feet by the so called white knight aircraft, before they separated, and then rocketed into the stratosphere. After landing back on earth, 62-year-old pilot, that's right, 62-year-old pilot, Mike Melville said he would pay $1 million to do it over again. He may have a chance to do it sooner than he thinks and at somewhat considerably less cost. Scaled Composites is one of 24 companies competing for the X-prize, a 10 million dollar reward for the first private funded group that will send three people on a sub orbital space flight.

Still ahead, making the grade. The Pell Grant Program, created to help low income students, but it's not keeping up with the rising cost of a college education, leaving the students behind and their families trying to finance an education while their budgets are severely burdened. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Startling increases in college tuition, leaving low income students with growing levels of debt. The Federal Pell Grant Program has had few adjustments since it began back in 1975. Now, there are calls for the program to keep pace.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Luis Torres is a junior at Georgetown where the room and board is more than $42,000 a year. He's receiving the maximum Federal Pell Grant of just over $4,000 a year. It barely makes a dent.

LUIS TORRES, JUNIOR, GEORGETOWN UNIVERSITY: I have a work study job. I tutor. I do as much as I can to bring in extra income.

SYLVESTER: Two decades ago the average Pell Grant covered 84 percent of the cost of attending a four-year public or college university. Today it's lucky if it covers 40 percent of the costs.

SANDY BAUM, SKIDMORE COLLEGE: Unfortunately there are students not going to college or not enrolling in a four-year college or college of their choice because of inadequate recourses.

SYLVESTER (on camera): Pell Grants have not kept up with inflation. At the same time, tuition rates have soared. To make up the difference, more students are borrowing money.

(voice-over): According to a survey by student loan company Nellie Mae, a graduate will have $19,000 in debt, up 66 percent since 1997. A new Jersey Senator Corzine is fighting to expand Pell Grant aid.

SEN. JON CORZINE (D), NEW JERSEY: It is important to America's economy. It's also important to have that upward mobility that's been a part of the American promise. SYLVESTER: Luis Torres hopes to have a master's degree in sociology, and teach or work for the government he's finding good grades are not enough if he doesn't have money to pay for college.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: A mixed day on Wall Street. The Dow down 34 points. The Nasdaq added less than a point. Well, the S&P 500 not worth mentioning, down just about a point. Oil prices are worth mentioning. An all-time high in after how trading topping $41 a barrel. Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Indeed worth mentioning. Those energy prices are really a squeeze on the middle class, Lou. And Wal-Mart CEO Lee Scott is concerned. He says record gas prices are sucking $7 a week out of his customers' pockets, that's $7 less to spend on groceries and cheap Chinese toys. Analyst say the average Wal-Mart shopper makes $40,000 a year. So, $7 a week for 10s of millions of American families that's significant. Now, energy prices make it more expensive for Wal-Mart to ship goods at a time when its expansion is slowing. Piper Jaffray has a hold on Wal-Mart shares, Lou, in part because of mounting community resistance to Wal-Mart's blue box cheap stuff stores. But Wal-Mart is tweaking its strategy, adding Dunkin Doughnuts. It has groceries, nail salons. It's ironic, a lot of the analyst say, because it was Wal-Mart, Lou, that was almost sounding the death nail for the American shopping mall. And Wal-Mart is looking more like an American shopping mall.

DOBBS: Absolutely. Christine, thanks. Christine Romans.

When we continue, the results of our poll tonight. We'll continue in just a moment. Our director and producer will be on high alert as we do.

(COMMERCIAL BREAK)

DOBBS: The results of our poll, 58 percent of you say, the United States should we should capture or kill Muqtada al Sadr, and 42 say we should negotiate.

That's the broadcast for tonight.

Tomorrow, Governor Rendell of Pennsylvania, standing up to pressure from the White House over controversial trade policies. He will be our guest.

Please join us. For all us here good night from New York. "ANDERSON COOPER 360" coming up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com